Pratum Blog

The Washington Post published a story last week about the rising threat of fraud against small business in the US. (Read) Brian Krebs does a good job of finding some examples of small businesses as well as government agencies like a school district which have been hit with financial fraud.

The FBI has begun to investigate cyber crime rings in Eastern Europe which are targeting US businesses. One of the concerns is the lack of data to support there is a problem. Many companies fear the bad publicity of announcing they are the victim of cyber crime. This creates a big dilemma. First, if not reported as a crime the company has few legal options in trying to recover any loses. Second, crime is investigated based on statistics. If nobody reports cyber crime, law enforcement agencies will never staff those investigative divisions appropriately and the waves will continue to roll.

Mr. Krebs' article included a quote from the controller of a small electronics calibration company in Louisiana. The company lost close to $98,000 in two attacks days apart. There real loss however was the investigation and recovery which is estimated to be 3 times their hard financial loss. That's nearly half a million dollars. This would effectively cripple most small businesses from a cash flow and operations perspective. Many of which might never recover.

If you own a small or medium business and think information security is an expenditure you can't afford, I beg you to reconsider. Not because I want your business, but because I BELIEVE in small business. It's the foundation of our economy. A risk assessment, vulnerability scan and some help with remediation efforts will most likely cost you between $20,000 and $50,000 when using a reputable and experienced consultant. That's no small chunk of change. But when compared with the staggering losses, both soft and hard, which are being felt by others it's really a drop in the bucket.

I can't guarantee you won't be a victim just because you spend some money on security. I can however assure you that you have reduced your risk of being a victim. That's what smart business people do on a daily basis, manage risk.


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